How CTV+CSFS improves BitVM bridges

In the examination of transaction handling in blockchain technology, a nuanced method is proposed for processing inputs, necessitating separate transactions to avoid creating a hash cycle. This approach involves using a variant of the transaction hash (txhash) to validate that both sides of a transaction are derived from the same transaction ID (txid) while correctly identifying the output index (vout). Specifically, the validation checks ensure that for input 0, the transaction ID of input 0 matches that of input 1, and the current index is 0. Similarly, for input 1, it confirms the same transaction ID for both inputs and verifies that the current index is 1. This method requires that the transaction in question has exactly two outputs; if not, additional checks must be implemented.

The exploration of this technique reveals a subtle yet significant distinction between handling two inputs that must be spent together from the same transaction versus managing one input that embodies the value for both. The latter can potentially be divided into two after a certain delay if necessary. This discussion raises questions about the practical relevance and interest of such a method, considering the marginal differences in its application compared to traditional approaches.